Recently we had a chance to catch up with Matthew Mierzejewski of Rimm-Kaufman Group (RKG) to discuss his experience managing Product Listing Ads for his clients.

Founded in 2003, RKG is a data-driven online marketing firm that specializes in paid search marketing, multichannel attribution management, and display advertising. RKG has 170 clients that range from start-ups to the Fortune 500 and that include both B2C and B2B direct marketers. In August of 2008, RKG was named to Inc. Magazine's list of the Top 500 Fastest-Growing Private Companies in America.

Matthew Mierzejewski, RKG’s VP of Client Services, has been working with Product Listing Ads for clients since they launched last year, and he’s offered to share some of his results and recommendations for other saavy marketers here:

Inside AdWords (IA):What initially drew your interest to Product Listing Ads?Matthew Mierzejewski (MM): We have many retail clients who are looking for scalable ways to increase their presence in search. Because Google managed the targeting for Product Listing Ads, we wanted to see how much incremental traffic we could gather outside of our existing keyword-targeted campaigns. Also, the prominent ad listings with highly relevant product images are an extremely attractive ad space to play in.

IA:Was the implementation challenging?MM: Most of our retail clients are already using Merchant Center to get free traffic in Google Product Search. For those clients, the basic CPC implementation was pretty simple. Furthermore, working with Google to implement some additional attributes was helpful and has allowed us to accurately track and improve our ROI.

IA:How much incremental traffic should an advertiser expect from Product Listing Ads?MM: It varies a fair amount based on product category and bid level, but we see some clients getting up to 10% additional traffic from Product Listing Ads. These are clients who have already done a lot of work with their core keyword-targeted accounts, so it was great for them to have another tool available.

IA:How do the conversion rates for Product Listing Ads compare to keyword-target text ads in search?MM: We've seen conversion rates up to 10% higher on Product Listing Ads compared to average text ad conversion rates. Taking it one step further and looking at queries that serve both a Product Listing Ad and a text ad to the same product-level landing page, we're seeing Product Listing Ads in some cases with a 30% higher conversion rate. With all other elements being held equal, we conclude that since the user is able to see the exact item of interest, price, and often a promotional message, they are more likely to convert per click in Product Listing Ads versus text ads.

IA:How do the costs for Product Listing Ads compare to keyword-targeted text ads in search?MM: In general, where the data is significant and we're bidding effectively to ROI targets, we're bidding and paying up to 15% more on Product Listing Ads compared to text ads. Though, as I called out earlier, in many cases we're seeing a greater return on Product Listing Ads traffic, so we can afford to be slightly more aggressive [with our bids].

IA: How do results vary between clients who use cost-per-click (CPC) pricing versus those who use the cost-per-action (CPA) pricing?MM: We don’t see much difference in terms of conversion rates between CPC and CPA pricing. Though, in general, clients who use CPC pricing have been able to get more volume than those who are using CPA pricing. We like the idea of CPA pricing, but if we optimize our CPC bids we’re able to meet our ROI goals just as easily. It’s all a matter of testing and optimizing.

IA:Who do Product Listing Ads work best for?MM: Advertisers with products that already do well in natural product search are ideal, since they know that users are already searching for their products. In general, when a user’s query can closely match a specific product in your Merchant Center feed, you’ll do better. For example, canon eos 60d will do better than men's suit coat. Think of it as objective versus subjective user intent that a robot would have a hard time parsing out.

IA:What advanced tips do you have for an advertiser using Product Listing Ads?MM: Advertisers should be using some combination of, if not all available, Merchant Center parameters available to them: adwords_grouping, adwords_labels, adwords_publish, and adwords_redirect. Those attributes should be used to set up granular product targets inside of AdWords. Segmenting those bids will ensure proper ROI goals can be met. Sometimes this means using multiple attributes together to get the best result.
Finally, you should consider utilizing promotional messages for various product targets. These can easily differentiate your ad from the competition and can lead to higher CTRs and CRs if you can afford the offers.

We’d like to thank Matthew and RKG for taking the time to talk to us about their experience with Product Listing Ads so far. To learn more, including how to get started and best practices, please visit our Help Center.